Bank’s bad position justifies executive bonuses, Co-op
Co-op bank will fire 500,000 workers and lose an estimated £2bn this year, but the bank’s bad position justifies giving its management team more cash than last year, says an internal document.
The CEO of the faltering Co-op bank is receiving a total pay packet of £3.6m for his first year in the job, according to documents seen by the Observer. That includes a base salary of £1.5m, a retention payment of £1.5m and pension and contract payments adding up to £3.66m a year.
It’s more than double what his predecessor, Peter Marks, got the year before – £1.3m.
Several other members of the senior executive team of the bank are set to receive pay rises said the article, with seven other executives paid a total of over a million pounds.
Previously Co-op executive received an average salaries of £200,000 – £400,000.
Justification
The pay rises were reasonable given the pay of executives in other companies, said the salary consultants who prepared the document for the Co-op.
The document also said that the bad condition of the bank justified the executive pay rises: because the new senior team faced a particularly difficult time fixing the problems that struck the bank last year – when chairman Paul Flowers had to resign over claims he had bought crystal meth and it was revealed the bank suffered a huge loss in 2013.
The loss is expected to be over £2bn when the Co-op reports its results next month, and stems largely from its banking division. A significant number of jobs will be lost too.
‘Personal attack’
CEO Euan Sutherland hit back against the leak on Facebook – which he called a personal attack that made it harder for the Co-op to get back on its feet.
“We seem to have an individual, or individuals, determined to undermine me personally,” he wrote, on the Facebook group Cooperative Employees.
He said he believes that the leak to the Observer originated from the Cooperative bank boardroom, and said it made his job harder.
“Leaking highly confidential internal documents to the media before decisions have been made only makes our open approach to discussion more difficult to sustain.”